By John Coomer, Practice Administrator
Patients frequently call upset that they were not aware of the financial responsibilities associated with health insurance. Often, they don’t understand the terms of their contracts and what they have agreed to pay per their health insurance policies. These three simple terms create much confusion we hope to help clarify.
Copay or copayment: A contractual agreement between the insurance company and the insured as a set amount paid by the insured (patient) for an appointment. Legally, this fee cannot be waived by providers. Insurance companies reduce their payments to providers by this amount.
Deductible: The dollar amount paid by insured individuals for medical expenses before insurance benefits. This is an annual amount that renews the first of each year. Patients who have met their deductible can receive more benefit for procedures or surgeries scheduled before the end of the year. Healthcare providers cannot waive deductibles. The amount charged to patients usually reflects a substantial reduction of the original charges.
Coinsurance: A percentage of each claim after deductibles are covered that is paid by the policyholder. For an “80%/20% plan,” once the deductible is paid, the policyholders pay 20% of their covered medical costs.
Generally, copays are not subject to deductibles or coinsurance. However, an emerging practice is applying deductibles or coinsurance to in-office procedures (example: ear lavage) and minor surgery (example: newborn circumcision). Another scenario can occur when a patient comes in for a well child check and during the examination, is treated for conditions outside the scope of the physical. Insurance companies may require a second copay. It is important for patients to know their insurance benefits!
Most doctors’ offices require patients to sign financial agreements that include acknowledgment of responsibility to know insurance benefits and agreement to pay for uncovered services. There could be unexpected charges if a patient is not aware of what is covered.
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